Samuel Edwards: Today is November--not November. It's December first,
officially. My name is Sam Edwards and today I'm here with--
Dick Stewart: Dick Stewart.
SE: And we will be talking about the history of Chroma Technology Corporation,
his experience as an employee owner and the structure of the company. Would you
like to introduce yourself Dick?
DS: Hi, I'm Dick Stewart, a founder of Chroma Technology. I was originally the
president of this company and production manager from 1991 to 2007 at which
point I decided to retire. And after five years of retirement I decided to come
back and it seemed like the best place to plug me in was in the sales department
so that's what I'm doing now. I came to Vermont when I was 18. I'm originally
00:01:00from Rochester New York. There was a small, tiny college called Mark Hopkins
College in Brattleboro. At the time I enrolled there, there were 14 other
students. Mark Hopkins was an educator who it was said that the best college
would be Mark Hopkins on one side of the log and a student on the other. And so
there were only about five professors and they all taught multiple subjects and
they were all really brilliant and really interesting people who--the reason I
went was to study archaeology. There was a post-doc from U. Mass there and he
was doing, he had discovered and was working on a very interesting
archaeological dig in Hinsdale, New Hampshire. I lasted there about two years
00:02:00and then I just started kicking around working in restaurants in the Brattleboro
area for several years. I had a number of friends at Marlboro College and
considered going there because I used to like hanging out there on the weekends,
it was really a great place. And one of the people I met their decided to study
optics and he ended up going to the University of Arizona--I think that was what
he did. He got his, he graduated from Marlboro and I believe he was doing
graduate work in Arizona and he got asked to come back to Brattleboro to work at
Omega Optical. And he was, you know, pretty good friends, acquaintances and I
was bartending in downtown Brattleboro and he came in and have lunch at the bar
00:03:00one day and he said, "How long you want to keep doing this?" I said, "I don't
know." "Well you should come over and work for Omega." And I had no idea what it
was. I had heard the name before but I had no idea where it was. And he said,
"It's the church, it's the stone church on the corner of Throw Street and Main
Street. Come in come in the back door. There's an alley behind the church, come
into the back door and come downstairs and interview." So I did and it was a
strange and wonderful place. The interview consisted of walking around and
speaking to everybody who was working there and they could ask you whatever you
wanted. Bob Johnson the president asked me if I like working on like my car and
I didn't really like it. I tended to do it because it was cheaper than taking it
to a service place, so that sort of clinched it for him. So I started out
00:04:00working in the glass configuring shop and I worked there for about a year until
the person who was operating the IR coding chamber decided to move on. The way
things worked at Omega at the time is if you wanted to try something else, you
could try something else. So that's what I did: I operated that and one other
evaporator for about 10 years. It was one of, one of the products that I worked
on all those years was a set of IR filters in the 2-micron range that went into
something that was called a grain quality analyzer and it had a wheel that spun
00:05:00these IR filters in a pattern that would make a spectral profile that
represented oil, protein, starch, whatnot, so you can put corn or wheat or
barley into this scanner and it would tell you whether this grain is best for
human consumption, bread, dog food, whatever. So, so that's, that was a, that
was the main product that I have worked on.
SE: When did you start working at Omega?
DS: December of 1979. And it was fun. It was a great; we had we had a blast.
There are lots of smart and good-humored people working there. And Omega started
00:06:00growing very quickly. He had an export company and the man who worked for the
export company was a German fellow who was quite dishonest. He would, when he
was visiting Omega he would dip his hand into the rejects, the reject filters
and put them in his pocket and then he tried to peddle them to different
customers. He was eventually, he actually got Omega to do business with a number
of large instrument makers in Europe and in Scandinavia and so Omega grew very
00:07:00quickly. By 1989, there were so many people working there, I can't remember how
many and it was in two locations. Bob hired--I think he was a sociology
professor from Marlboro--to come and observe the way that Omega operated and
make suggestions for how to reorganize it to improve it. And then after several
meetings with him and other, other groups of people, he recommended putting
together--I can't remember what it was called--a coordination committee or what
it was called but it was a group of people who are going to start trying to
manage different departments. There weren't really any department but they were
00:08:00trying to, they're trying to organize. What inevitably happens to any group of
human beings when they're doing the same function and getting more and more
people that need to be on board to do this, and so I was asked to be production
manager and I agreed to do it but I continued to do my day job. I had seen so
many people come and go from Omega because Johnson is a classic sociopath. He
will say whatever he needs to say in order to get what the results that he
wants. He assumes that because he says something, because he was surrounded by
sycophants, that what he said was true. If this sounds like a familiar to you
00:09:00anybody else that you might think that it's been in the news recently who fits
SE: Yeah the way of describing Bob, I've gotten some descriptions from other
founders but I think you were probably the most explicit about that description.
DS: So I continue to enjoy working for Omega but I was beginning to be a little
bit worried because he would say one thing and then do another. He would make
statements to the company at large and then when the smaller group of management
people were together he would speak more truthfully about what he was really
thinking. And so I kept my eye on him and what he was doing and at some point, I
00:10:00was, I was leaving on a Friday afternoon, this was in the fall of 1990, and I
passed Paul Millman on my way out the door and he said something like, "You look
really discouraged," or something and I just said, "I really love this business,
but I really wish there was someplace else I could work." And out of the side
of his mouth he said, "Well there may be some time in the future." So over the
weekend I called him, I think this was some time in November, and I said, "What
did you mean when you said that?" He said, "Well, nothing really, Wim and I and
a couple other people have had over beers talked about maybe you know we could
start our own filter company." And he said, "We, we talk about it but nobody's
doing anything. Nobody's moving it forward." So I said, "Well I would really
00:11:00like to do this." So I talked to Wim and he said, "Yeah, I've really had it."
Wim had been trying to get money allocated so that he could develop automated
coating equipment. He presented a written proposal saying there's no reason a
person should be tied to an evaporator all day doing something that a computer
could do much better than a human. And so Bob it very half-heartedly funded it
but it was sort of bogged out and Wim was getting disgruntled. [I'm] trying to
remember who else was involved in those. It was basically just informed informal
00:12:00meetings over beer and I remember at one point I put together a list of every
piece of equipment bare-bones that you would need to open a filter company, an
optical coating place. And I gave it to Wim and Wim added to it, commented on
it. I can't remember--somehow Jay got involved. There were couple people who
never ended up doing anything that were also sort of --it was all sort of, it
was mostly blowing off steam basically. We were saying, "We can do this better.
We have the skills and the experience to do this." So in March of , I got
00:13:00called into a meeting on a Friday afternoon and it was the management group. I
was now production manager. There were managers, nominally responsible for
different areas of the company and they said, "We are going to fire Paul Millman
on Monday morning and we have to plan for it, make sure that the staff is
informed after it happens and just keep everybody moving along normally."
SE: How important was Paul's work to the company at that point?
DS: He was the salesman. He had been the salesman I think for a couple of years
and he had grown the fluorescence microscopy business. What was happening was
00:14:00fluorescence was becoming a major tool especially for geonomic work and other
things. And the microscope companies were very staid and laid back and they
basically, they offered very basic Flintstones' filter sets but the science was
flying forward. There were new fluorescent dyes being invented at a huge rate
and there were not the filters available to actually very effectively use them.
And so scientists kept coming to us and saying, "Can you can you make a filter
set of this these wavelengths?" And Paul, Omega was a general optical filter
company: a lot of the filters were very basic very simple but the fluorescence
00:15:00filters were more difficult and more precise. And Paul gravitated towards this
market partly because the people were so interesting. So he was also outspoken
and he was involved when Omega started offering health insurance. They wanted,
Bob Johnson wanted people other people to do the legwork and you know figure out
what was, what was best. So Paul got involved in that and what led to his firing
was a conflict with his manager. Bob had hired a man with no experience in
optical filters to run the sales department and he sort of insulting everybody
00:16:00by giving this guy an enormous salary--everybody else is on hourly wage and this
guy was getting, at the time seemed like a high salary of 30 some odd thousand
dollars, this was 1991. So when I got home on Friday, I call Paul and said,
"They're going to fire you on Monday." At that point it was people involved in
the discussions were Wendy Cross, who was Paul's girlfriend or significant
other; Jay, Wim, and a guy named Rusty Lindgren, who was a good friend of Wim's.
Now Wim was in the process of trying to adopt a Russian child with his wife and
00:17:00was really nervous about his you know being well employed. So he was getting
cold feet and Rusty was a good friend and somebody who was really into the idea
of starting a company and it looks like the only way to get Wim to come would be
to have Rusty work with us too. And so over that weekend I said to call--I know
Frank Kebbell was very unhappy because I was managing him and he didn't like the
rising bureaucracy but I really liked him. I knew that he could make things
happen using. He was very good at carpentry, he could, he did several
00:18:00construction projects at Omega and I knew that if you gave him free access to
the lumberyard and two weeks, all of a sudden there would be something there. He
was very, very good. So over that weekend I said I think Frank would be really
good to have Frank join us too. So I went up on the Sunday before the Monday and
said, "I got something to tell you, you know Frank: Paul is going to be fired on
Monday. But don't worry about it because I'm going to try to talk him into
starting a filter company." And Paul was already talking about moving up North
and you know applying for the director of Euphoria Ben & Jerry's-it was a real
position that was opened.
SE: And I think it still is. It's just where he's chosen to be and where he is now.
00:19:00I wouldn't say two totally different paths, but it would have been a very
DS: So, you know, Paul and I guess--I'm trying to remember-- the HR person
who's going to fire Paul, asked Frank and me to be there because we were friends
with him and I am not sure why but so we were all present. Paul, I can't
remember what happened--Paul walked in and said, "Yea, I know you're going to
fire me," et cetera. And he worked out a severance deal that was not bad for the
time. And so I was responsible for telling the staff in both locations why Paul
got fired and the first meeting at the church was really difficult. People
00:20:00really upset; they were saying, "Paul's a great salesman," you know. Annual
sales were under a million dollars when he started and they were over 3 million
now. And he's a competent and really hard-working salesman. If we are competent
and hard-working, are we going to be fired next? And I didn't know what to tell
people, so I had another meeting the next day at the other location and I went
to Bob and said, "What do you want the company line to be here? What do you want
me to tell people?" And he was sort of working on something else and he just
said to just tell them a better day is coming and you know some bull shit. So I
00:21:00went home that night and I started stewing and I realized that I couldn't work
there anymore. There's no way I could walk in and tow the company line anymore
so I went in the next morning absolutely positive that I was leaving and I
basically spent the whole day talking with Bob and telling him why the company
was not going to succeed going forward. It was dirty, disorganized, there is
perhaps no computer network: half of it was Microsoft and half of it was Apple
and you know they hated each other and there was no, there was no good
organization and when the people were running the grinding and polishing
department quit, he hired in confident people who were destroying everything we
00:22:00sent there. The litany was long and he finally said I want you to come down the
street and meet with the rest of the managers and repeat what you just said to
me so I did. And by the time I left that was completely exhausted and I ran out
of gas on the way home. I remember that. So then on the next day, I started
putting together a real business plan. I started you know...
SE: For Omega, or what would become Chroma?
DS: What would become Chroma.
SE: Had you quit Omega yet at that point?
DS: Yea, I walked in and I told him I quit and I spent the day telling him what
was wrong with the company. I'm sorry, maybe I didn't make that clear. So I
00:23:00started hanging out in the library; they had a set of Thomas Registries there
and I just had the list of every production supply and every piece of equipment
we needed and I started working on a business plan. I met with--I can't remember
the name of the guy-- there's a, there's a an organization that, I think it was
a state organization, that helps people start businesses and give advice and
resources and--try and remember, oh, trying to remember right before Paul was
fired and I quit or whether it was right after-- A neighbor of mine who's an
00:24:00attorney up here said I think that were thinking of going into business in
competition with our current employer-- it was before--and I think we need legal
advice on how to do this without was stepping in our own shit at all. So he
gave me the name of his partner and Paul and I met with them and he recently
passed away, he was George Nostrum from Bellows Falls and he gave us the famous
line: you have to walk out with your hands in the air and your pockets turned
inside out; you cannot take anything physical from Omega, and you can't take any
00:25:00paper, can't take any documents, nothing. And okay, we just have our skills and
experience that's all we need. And so it was pretty happy about that. So I put
together a really crude business plan and started passing it around to family
members and we managed to raise some, not a ton of money, but enough so that by
it was by, I think it was by, May around the time we actually incorporated,
George Nostrum, the same guy who gave us advice, wrote up our corporate papers
and I think it was May 21st, 1991, that we got our papers and our corporate
00:26:00documents. And Wim I went to the Boston area. There are all these used equipment
places that sell two basic vacuum chambers. We're also getting support and
advice and actually used his places of meeting place from David Bradford at
Bradford Machine who still makes our filter cubes for us. He's long gone but his
company does. We actually, we actually gave him 500 shares of the initial
offering and gratitude. He must have done a total of between 50 and 75 thousand
dollars' worth of machining in the first year and his partner was getting really
00:27:00upset but we paid every penny. But that faith, he liked the way we were
developing the company and he knew that it was going to be profitable for him so
that worked out okay.
SE: In putting together the corporate papers and beginning the company, when did
you guys start the process of identifying that you wanted to be employee owned?
DS: Well Paul said it's got to be employee owned, he said that right off the bat
and I said okay I don't care I just want this company to make it. I just you
know I just want a place to work and be able to make filters. That's all I care
about, whether I'm a principal owner or we're all partners. Employee ownership
at that point to me meant the seven of us would all be partners, so, yea, that
sounds fine. And rusty had relatives who were willing to invest but they wanted
00:28:00equity and Paul said, "this isn't going to work," and he said, "what should we
do?", and I said, "You and Rusty have to sit down and work this out." And so you
know Paul in his persuasive way basically got Rusty to back down and agree to
the employee ownership, as long as he got his fair share. So around that time we
went to the ICA group in Boston and spent an afternoon hammering out the models.
And the coop model was immediately not interesting to any of us. I think, I
think Wim and Rusty were both there, but it was Paul--I remember Paul and I
being there. And the ESOP model was also, it felt, constrictive and expensive,
00:29:00it was very expensive. I think at the time it was going to cost around seven or
eight thousand dollars to set up the entity that that is an employee stock
ownership program and we just didn't have it. What money we had needed to be
going to equipment and supplies and whatnot. And so the ICA group basically
said, "Ok, you, before you decided all this, you made yourself a c-corp, so
that's a very basic model. You can actually within the C Corporation distribute
shares and you can bonus the cost of those shares." So they basically worked out
the third way for us.
SE: Have they implemented that model with anybody else?
DS: I don't think so. And they had a guy who was really good, I don't know there
was an accountant or just was good at business, he helped us develop a more
elaborate business plan because we're going to try to get loans from the banks.
He had us sit down and go through the scenario what do you think is going to
happen in the next two years and Paul said, "Well, try to get you know business
from these and these and these--" "And how much do you think that's going to
be?" "Well it'll be this much." And I remember at one point Jay going, "That
sounds like an awful lot of work!" And the scenario actually ended up happening
00:31:00but like tenfold-- it just took off. And I think we broke even and started
getting into the black-- Well we made our first filter in September of that year
of 91 and I think it was in June or July of 92 that I was tallying up the
month's sales and I went, "Oh, wow, we're making more than we're spending," and
I remember calling Paul and saying, "Hey, you know we're actually in the black
now. We can't afford to pay ourselves but we're in the black." So that was
pretty amazing. Trying to remember what else interesting happened. We, I don't
think, well we hired somebody. Paul and I became aware that I couldn't do the
00:32:00financial stuff. I wasn't trained to do it. I was busy making filters and
helping trying to keep it organized as best I could. So we hired a friend
part-time, the first employee and that was in September, around the time we made
our first filters. We had a site visit from AMICO research which later became
our best and brightest customer who was deeply involved with the human genome
project and developing a line of florachrome's that were going to be used for
fluorescence in c-tube hybridization or fish and they actually got patents on
them and they wanted to sell the filter sets to end users without anybody being
00:33:00aware that we were making them. They wanted it, they want the filters sets to be
their brand and so we signed agreements and set up paperwork and structure so
that we could we could keep really careful records of everything that we were
doing because their goal was to get into the clinical market and FDA would be
involved and there needed to be a concise paper trail so doing business with
them initially actually helped us a lot, you know, with the organization of that
stuff. And they signed an agreement with us before we even had a piece of
equipment up and running which was you know an act of faith and gave us courage
SE: Yea I want to back up a second. I know that, and you can correct me if I'm
wrong, Rusty did not end up starting the company. From what you said, it sounded
like he backed down from getting his family to own equity and agreed to employee
ownership but did he end up joining the company when it was founded?
DS: Yes, he got founder shares and he helped Wim with the electronics; he was
very interested in the software actuated equipment, automating equipment. And he
also agreed we basically were splitting those the day-to-day work that needed to
be done and he was involved with glass cutting and whatnot. He became
00:35:00discouraged at how slowly the automation process was happening. Wim was
basically saying first we gotta get the equipment up and running manually and
then go through the process of figuring out how to automate. And it by April of
92, Rusty was really unhappy saying, "I don't feel like cutting glass; I should
be doing, I should be writing software, I should be doing electronic." He said,
"This whole thing is moving much slower and this is not the company that I
thought it was going to be." and he stopped showing up for work and finally he
just said, "I want to sell my shares." And I think that was May of June. And at
that point, Wim was on board. We didn't have to worry about him. I guess I
should back up. Frank gave notice shortly after I quit; Jay had gone off on a
00:36:00sabbatical, he had been involved in making filters for the Hubble Space
Telescope and it had exhausted him and he wanted to take some time off. So he
was, he had attended early meetings but he was often Morocco at the time, and
Wim you know kept coming over to the space that we have rented and he saw that
we have you know systems, vacuum systems sitting there, but there was no
infrastructure. And he was saying, "This looks like it's going to be really
difficult. I don't know whether I can quit right now." I'm thinking, if we don't
get Wim, this is not gonna happen and Wendy was still working there. So in early
00:37:00June I figured I need to stir the pot and I just walked into Omega and we had
been keeping really quiet, we you know Brattleboro is a small town. Everybody's
lips were pretty well sealed. I think Paul might have told a few people but it
was mostly quiet. And I walked into Omega and I said, "Can I talk to you for a
minute," to Bob. And I said, "We started a filter company that's called Chroma
Technology. There are seven of us involved and it's me, Paul, Wim, Jay, Frank
and Wendy. And Wendy and Wim were still working at Omega and so I said, "We're
going to be making high-end filters and we will compete with you." And he
00:38:00thanked me, we talked for like five minutes. I walked out and I know he thought
we weren't going to succeed. But he immediately fired Wim and Wendy, which is
what I wanted. I wanted Wim to get a kick in the ass to get Wim, get them out
and Wim did get an agreement that the software that he developed while he was at
Omega would be his as long as any revisions got shared with the Omega. Wendy was
fired but the management was in such an uproar that they asked her to stay so
that she could answer the phone so they could keep having meetings. So, anyway
so that's how we got Wim and he started showing up for work at Chroma and we
00:39:00continued to buy the equipment that we needed. The first vacuum system that we
bought got taken over the Bradford Machine and then over the course of three
months, we, especially Win but, worked on the architecture of what he wanted so
that yes, this would be manual at first but there's places for servo motors and
everything that would be needed to automate later.
SE: How long does it take for him to get it automated after that?
DS: I think it happened in increments and I believe it was, it must have been a
year and a half because we needed to produce stuff and it's difficult to work on
a piece of equipment while you're actually making it. And we didn't have--the
00:40:00only spectrophotometer that we had was the system which had a light source at
the top and a monochromator that was monitoring the coating that was going on.
And so in between the coating runs we had to measure the filters that we made
that was to spectrally measure the filters that we made. That was the only way
we had to do that. And David Bradford's partner over at Bradford Machine was
getting upset enough so that when they made this cube alignment equipment that
he used a laser and in order to make sure that the filter cube was properly
aligned in the microscope it needed to be aligned and glued in place so that
over-- anyway there was an expensive piece of equipment and they wouldn't let us
take it over to Chroma, it had to stay at Bradford Machines. For the first six
00:41:00months I had to take boxes of cubes with filters in them over to Bradford
Machines to get them aligned. I'm trying to remember other interesting things
that happened around that time. Yeah so we shipped our first order in
September-- no, October 2nd.
SE: In what year?
DS: 1991, so it was about five or six months between the time we incorporated.
DS: Okay. Well you've give me a lot of history around the beginning of the
company. That's actually very helpful, particularly for the document I'm making
for the company. Do you want to kind of give like a broader overview of how the
nineties developed the company and a date that I'm thinking is up to about 2002
to 2003 to when you moved from Brattleboro up to this building I think.
DS: Okay, so. We began hiring people and expanding rapidly. The cotton mill
where we were located, the businesses, startup businesses next door to us and
around us started going out of business and so we kept grabbing their space and
there really seemed to be no end to the business that we could get. It was
amazing. And of course it was extremely exciting but it was also very stressful.
I would have to look at numbers but we went from 7 to 15, 20 to 25, and we
00:43:00agreed that we would do annual stock distributions but you had to work for us
for a year and will really plugged in and proven yourself that yes, you deserve
to be a part of this organization before you would get share. Business decisions
were done Quaker-meeting style. We just hammered things out; occasionally there
be arguments but for the most part we did okay. I think--I'm trying to remember
what precipitated it--but it became clear that I think in 1999, around the
lawsuit with Omega got settled, we recognized that we needed an active board
00:44:00directors. We basically were just operating seat-of-the-pants, very
disorganized. We waited until a crisis occurred before actually, just reacting
to it. We put together a group of founders and a couple of other people and we
spent about three or four months working out a new structure and we also
formalized share distribution for a model that would work for a larger company.
We used to have issued a block of so many thousand shares and then divided up by
how many employees there were so you know the first distributions were up in the
00:45:00many, many hundreds and then at that point we decided, then I think it was the
2000s, we decided, okay there's going to be a set amount that is the
distribution and the board always said, this is the way we're going to operate
for now but we have the right to adjust it, if it needs to be adjusted. And then
of course we realized that we didn't really belong in a business incubator
anymore. We'd taken up some odd thousand square feet of the place and so we
started looking for other options and it became clear that Brattleboro was not
particularly helpful and I don't know if you know Brattleboro at all but the
land is, there's very little developable land and because Brattleboro
00:46:00Development Credit Corporation had been our landlord for over 10 years, they
weren't very helpful. We had sort of a bad relationship with them but we didn't
have a great relationship with them and they didn't want to do the legwork for
us. But Bellows Falls was really excited and really wanted us to buy this space.
And New Hampshire was even more aggressive. They were throwing out all kinds of
incentives for us to locate over there and there was a space available and we
had our usual Quaker meeting--one share, one vote--and the majority of people
wanted to move to New Hampshire and then--
SE: Did you mean one-person, one-vote?
DS: Yes, one-person, one-vote. Did I say one share? Ok. So then we looked at the
vote by shareholders and five out of six of the founders wanted to stand Vermont
and the majority of shareholders, shares wanted to stay in Vermont. Okay it's
SE: Was that decision by chance because the founders had most of the shares?
DS: Yes, yes, but we were also the major stakeholders. We have made you know, we
had risked people's money, you know, we didn't--none of us had much. Paul had
put a little bit in but the rest of us didn't and all of us owed our relatives
money and so we were out there that way and we had also done the leg work and
00:48:00made the place operate.
SE: When had the company finally paid off the original loans?
DS: The agreements were a five-year agreement, twelve percent interest and we
wouldn't start paying the loan until the 13th month. So it just accrued the
first year so they were basically junk bonds. And we were all paid off by 1997,
yeah. So we never, we never missed a penny of payment to any of the original
investors and they did handsomely, they did very well. So that was the decision
00:49:00that made us say, "okay, there are--"-- I can't remember what the term is but
there's a level of importance that it has to be a shareholder vote, like I think
this we call them mega issues, where there needs to be a decision by
shareholder. And so after that we seriously began to look at this space up here.
00:50:00Are there other areas that you want me to cover?
SE: Yea, I guess I am curious, because today I was editing the document that
Paul has given to me about all this beginning part, of founding this building,
so I guess I was interested about that. I guess I am curious and in the first
ten to first 13 years or so of the company, how did employee ownership--because
I understand with you know smaller companies, when you have 10, 15 people, being
employer is very apparent because a lot of you are doing a lot of things. But as
the company grew, how did the culture of all, how did the feeling of an employee
owner kind of permeate the company? And even the new employees, the old employees.
DS: It was a mixed bag. There were pockets of dissension. Most of the people we
hired with great and we were all so busy, I mean we're just flat-out. And for
most people because the pay was so above and beyond anything they ever imagined
getting, I mean the bonuses were huge those first few years. We had a lot of
00:51:00profits and we didn't, we had plenty to continue to expand but we also had a lot
of excess so we were giving them out as profit sharing and so that made
everybody want to work hard. There was a definite relationship between what wewere doing what we were getting as a reward. But beyond that, especially it
seems like a group of the first people that we hired I think wanted more
control. They wanted a greater say in what was going on and they were getting
and it wasn't, it wasn't actually intentional, it was just in production I was
the principal and in sales Paul was the principal; in technical stuff Wim was
the principal; and in design Jay was the principal and so we basically ruled. We
00:52:00made decisions on a daily basis that this is what we're doing and then outside
of that there were decisions needed to be made and occasionally somebody on the
floor would make a decision that we clearly didn't agree with and so there'd be
conflict. We have pockets with people who you know this glass is really half
empty you know, despite everything that they were getting.
SE: I understand from the way Chroma tried to do its structure of you know, not
being a cooperative, not being an ESOP. And from what I've kind of gotten from
Paul is that that way you set up your ownership was to make sure that you the
owners (founders) had more control and more say in the way the company was ran
00:53:00but you also you know from that point on equally shared in the profits of the
company. So you have, the company has a very interesting relationship between
ownership and decision-making that while not as flat as a coop maybe is not,
it's not necessarily vertical but there's a much more equitable relationship in
the way I see this company runs.
DS: And I think the genius, the most genius aspect of what we did was control of
the company will always be in the hands of the people who worked here the
longest, regardless of how quickly we hire and that especially as the founders
exit, I think that model is stable. I think that the people who have been here
the longest have absorbed the culture for the longest will continue to make wise
decisions that are good for the whole organization. So that's the best thing we
SE: Least to say that your tenure is, aside from the people hired in the last 4
to 5 years, is well over 10 years. So that, the legacy of people being here the
longest having really been steeped in the company the, it really worked out and
you know for lack of a better phrase, in a very genius way.
DS: Yeah and yeah, I guess it served us well. I think you know leaders come
forward and they're not necessarily the biggest shareholders but you know that
they're going to stick around and we'll continue to recruit a percentage of the
ownership of the company.
SE: Okay, so we're at about 55 minutes now.
DS: Okay, I'm gonna have to eat.
SE: I just want to leave about 5 more minutes if you don't mind.
SE: Let's cover anything that sticks out in your mind in the last 15 years, up
until now obviously.
DS: The last 15 years-- well the move up here was huge and the people who
actually made it happen, weren't the people that we thought would and so that
was pretty interesting. Rick Holloway became very important. He was hired to do
maintenance work on the equipment and he all of a sudden showed incredible
leadership and vision for how to make this actually happen, you know--how can we
continue operating and be in 2 locations. So that was huge.
SE: What do you mean by two locations? Is that while you were exiting the Cotton
DS: Yeah, we had to, we had to move groups of vacuum systems up but keep the few
behind and have all the support needed to operate on so that was pretty scary. I
00:56:00don't have to get into the lawsuit that absorbed all out attention.
SE: I have had the document, I'll have plenty of time to look over that too.
DS: Okay, because that, took up a lot of attention and resources that could been
spent other places. We went through several-- it became clear that I couldn't
run operations by myself and so we started out by having what we called--I can't
remember what we called it--it is basically one person from each department--
SE: The Steering Committee?
DS: Pre-steering committee. I think it was called Coordination Committee. And
basically we hammered out any problems that any department was having, major
orders that were going to be going through, things like that, day-to-day
operations stuff. And it became clear at some point that that wasn't working.
For some of the people who were representing the departments weren't
communicating with their departments. They were just showing up at the meeting
and leaving when it was done and then not passing out important information
SE: How long did the Coordinating Committee last?
DS: I think about a year, maybe a year and a half and that was when--I don't
think, I think the steering committee was actually formulated after we moved up
00:58:00here and that became, that took a few years to actually gain its success. One of
the most amazing things from the time I left, I was gone for 5 years. When I
came back as a salesperson I was really impressed with major changes that have
been made in the operations. All of the inventory that we had was on a database
that hadn't been there. The website was now a market place, you could purchase
online, that had not been in place. All of the four key aspects of building in
terms of production flow had been reworked. Steering committee had done--maybe
00:59:00day-to-day here people didn't think the steering committee was doing anything,
but there was some major upgrades in our operations, very impressive.
SE: Ok, last two questions: do you want to briefly explain to me why you had
left for early retirement and then why did you come back, and maybe follow up,
why are you staying?
DS: Why am I staying?
SE: I mean, since you came back to the company.
DS: I think my temperament and my nature was comfortable with a company of 50
employees, or being in a leadership position of a company with 50 employees.
01:00:00From there on I think it was up to about 80 or 9 by the time I left, I didn't
feel like I had the wherewithal to be leader of the company. Above and beyond
that, I didn't want to. I loved the company and I love being a part of it but
and I think that my viewpoint from just the history of how this company evolved
was important but at the same time I was really burned out and I found that it
was getting more stressful than I could deal with. I also had a nice nest egg,
you know, I had founder shares and all that but I decided to leave in the fall
of 2007 and so shortly after I left the economy crashed and all of that with my
01:01:00investments that I had been depending on, not all of them but my--the income
that I could get from my investment shrank over 5 years and it became clear that
I couldn't sustain it. At the same time I was sort of walking in the woods
hanging out with my grandkids doing a lot of reading that I hadn't been able to
do but I was also waiting for the next thing to happen the next where I wanted
to go and I started doing more and more volunteer work in various organizations,
which was wonderful but it wasn't the next thing. I finally realized that number
one I needed to have a job again and I like considered starting another business
01:02:00or two but I finally had also decided that I missed the customer base. You know,
it's just such an interesting market and so you know I approach Paul and he
said, "Well what would you like to do?" And I said I'd like to, I want to do
sales. So that's what I'm doing. And the other thing about that was when I came
back, a lot of people who have been hired in my absence came up to me and said
thank you, thank you for starting this company, this is a great place to work.
SE: Cool. Well that concludes our interview.
SE: Thank you very much.
DS: You're welcome.